Pandemics became the top concern for insurance professionals this year as the COVID-19 crisis roils the industry worldwide.
Infectious diseases and pandemics were ranked as the most significant risks to society over the next five to 10 years in a study published Thursday by French insurer AXA SA. That’s a reversal from last year, when climate change was seen as the biggest concern. (Editor’s note: The report is available to download here).
COVID-19 is proving to be a major challenge for insurers, especially those that provide cover for canceled events such as sports matches and concerts. Disputes over coverage have led some policyholders to take legal action, with AXA recently losing a lawsuit against five restaurant operators. The insurer said it will appeal the ruling.
The survey of 2,600 insurance professionals in 53 countries, found that 56% of the respondents consider pandemics one of the top five emerging risks, up from 23% in 2019. Climate change is now the second biggest worry overall, but the views vary geographically as it remains the top priority in Europe but falls to the third place in the U.S. and Asia.
The reduced emphasis on climate change “is concerning, especially among our American and Asian respondents, as we believe that shorter-term issues around the pandemic should not completely overshadow longer-term threats,” AXA Chief Executive Officer Thomas Buberl said in a statement.
The European insurance industry has been working on ideas to develop state-backed solutions to protect businesses against future pandemics. The French government, which has sought public comment on a series of proposals this summer, hopes to complete work on a coverage plan by the end of the year.
Photograph: Medics from Beijing Fengsheng Special Hospital of Traditional Medical Traumatology and Orthopaedics on June 24, 2020 prepare for their shift at the Jinrong Street testing site. Photo credit: Nicolas Asfouri/AFP/Getty Images.
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